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How Global Capacity Centers Drive Innovation and Growth in Enterprises

Global Capacity Centers (GCCs) offshore facilities that leverage local talent to support global operations.

  • They scale digital strategies, help businesses tap into new markets by providing local expertise and support.
  • GCCs serve as a hub for knowledge sharing and talent development, which further reduces costs, increases efficiency, and drives innovation.
  • It is important for enterprises to choose the right location to set up GCC, which should have a strong talent pool, good infrastructure, and supportive government policies.

  • With 45% of the world’s GCC in India, the country has become a GCC hub. 70% are US-headquartered companies, 20% European, and 10% APAC.
  • The benefits of setting up GCCs in India include cost savings, access to specialized skills, and improved efficiency in operations.
  • Enterprises are contemplating the transformation of their global in-house centers (GICs) into global capability centers (GCCs) for various reasons. 

    GICs have managed back-office operations, corporate business support tasks, and IT support to enhance productivity growth. While digitization entails disruption and a commitment to change, enterprises still face bottlenecks. 

    GCCs are now a key enabler for overcoming challenges and accelerating tech adoption in enterprises. 

    Now is the moment for GIC executives and decision-makers to go beyond the cost center stage and turn GICs into GCCs while creating expertise around new technologies and embarking on an innovation-driven path. 

    How GCCs Boost Corporate Agility and Resilience 

    The journey of GCCs revolves around these trends and imperatives:

    1. Investment in technology resources

    74% of GCCs are digital skills pools and delivery hubs for their parent corporations. They oversee cost-effective product development and excel at scaling digital strategies. 

    Most Indian GCCs quickly moved ERP and older systems to the cloud in the past two years. They also invested in AI, ML, and advanced analytics. 

    They will keep upgrading their data mining infrastructure and technologies and handle tech-heavy and data-driven tasks for their parent organizations.

    2. Transition to the hybrid working model

    Before 2020, remote work adoption was slow. Switching to remote work would disrupt operations; therefore, they favored the status quo. 

    The events in 2020 compelled most businesses into remote work, where GCCs ensured work continuity. They prepared communication channels, network security, and database storage. New management approaches allowed seamless collaboration. 

    In the future, GCCs will embrace a hybrid-working style. 89% of GCCs use digital technologies for collaboration and virtual learning.

    3. Strengthen the talent pool

    The skill shortage has eroded the competitiveness of many businesses. Technology-savvy workers provide companies with an edge, and today’s businesses must recruit tech-savvy talent. 

    As per evidence, Indian GCC service providers hire higher-quality workers and retain them longer. These offshore centers provide parent companies access to more diversified talent. 

    India’s competent and diversified workforce helps GCCs fill their parent businesses’ personnel gaps. They: 

    • Develop proactive hiring and head-hunting practices, including campus recruitment and secondary market hiring. 
    • Establish strong ties with universities and other technical institutions, including vocational training institutions. 
    • Establish industry interfaces, especially with incubators and start-ups. 
    • Work towards continuous reskilling and upskilling of the workforce. 90% of Indian GCC service providers seek specialty talents and retrain their workers. 
    • Create an internal business service leader and expert pool. 
    • Enhance remote worker onboarding.

    4. Commitment to innovation

    GCCs drive innovation for parent organizations. Innovation, by nature, is disruptive. Most companies cannot afford such disruptions at their HQ. GCCs incubate new ideas without disturbing operations. 

    Innovation is also expensive. Low-cost GCCs allow enterprises to take chances. If initiatives fail, they can pull the plug. GCCs serve as incubation centers with structured ideation. 

    Indian GCCs have produced some cutting-edge advancements. Some first-of-its-kind initiatives include modern citizen identity, payment, financial inclusion, and education guidance. 

    Indian GCC as Strategic Centers 

    India has become a preferred GCC hub, with 45% of the world’s GCCs being based in India. Nearly 70% belong to US-headquartered companies, 20% are from Europe, and 10% are from the APAC region. 

    According to a survey, 78% of enterprises are creating a superior talent pool, 55% to assist the global demand for radical innovation, and 49% to optimize business strategies. 

    The sector is expected to grow 10.8% CAGR employment in 2023 alone. With more than 1 million engineers graduating annually, international companies realize the importance of leveraging this demographic deficit effectively. 

    Today’s need for specialized digital and machine learning capabilities such as data science, data analytics, data engineering, statistical analysis, and UI/UX design demonstrates the centers’ transformation into strategic hubs. 

    Let us look at some strategic established and new GCCs across sectors: 

    • Automobile: Dupont established an ADC in Hyderabad focusing on advanced material science integration to enable solutions for weight reduction, engine performance, safety, and comfort. 
    • Pharma: Sandoz will employ 1,800 individuals for its Hyderabad technology hub. The focus would be on highly trained and technical people, such as data scientists, to support the company’s global Knowledge Services. 
    • BFS: Focusing on product management and global digital technologies, Fiserv is increasing its engineering teams in India. 
    • Retail: Neiman Marcus Group (NMG) established a GCC in Bengaluru to create a new digital playbook that improves store, online, and omnichannel experiences. 
    • Software: Twilio established its Global Technical Center in India to develop and scale its cloud communication products and services, such as Voice, SMS, Video, and Chat. 
    • Energy: Shell has set up a major technology hub in Bangalore, accommodating up to 1,500 professionals collaborating on innovative energy initiatives worldwide. 
    • Semiconductor: Leveraging India’s new policy to attract the global semiconductor industry, GSS Ventures is developing a high-tech semiconductor park in Tamil Nadu, including a fabrication operation that will produce 1,500 jobs. 

    Successful GCCs reflect their parent organization’s beliefs, goals, corporate objectives, and culture. Digital transformation succeeds with a well-executed plan in a thriving ecosystem. 

    The potential these GCCs have achieved is merely the tip of the iceberg. 

    Draup’s Talent Intelligence platform gives organizations real-time insights to make informed workforce planning decisions. Its Workforce Planning feature helps workforce planning teams understand the talent ecosystem in trending talent hotspots. 

    They can also learn about trending roles so that workforce planning teams can plan high-impact strategies that can transform their workforce for the future.